Germany Joins the Safe Haven Club

1/9/2012 7:55AM

Despite a sharp fall in German industrial production data, investors were prepared to pay to hold T-bills as yields turned negative at auction. Dow Jones's Terence Roth and Martin Essex analyze what this means for the euro-zone crisis.

This transcript has been automatically generated and may not be 100% accurate.

I ... the ... so that's ... actually to call back in November raising Fed said ... that the whole of the euro zone could ... be headed into recession ... so all the euro has actually ... if I knew that but the prospects for the single constantly growing more and more in doubt ... to discuss the latest developments with the Hamas in Essex ... and Terry Roth of monsoon festival this biggest of the Gemini ... recession ... like it ... one is certainly true that the eurozone is doing pretty much worse than anywhere else are we seeing in America off this employment figures were sown Friday is is that there's a bit of recovery than ... the Chinese economy may be slowing but still growing Aprile ... and it's the euro zone in particular seems to be the problem now and not just the peripheral euro zone countries but now the EU's the figures suggest the court's in ... session maximum people be looking out the ECB ... hops content with the this with me that this week ... I think what's clear is the isthe is the isthe of the eurozone is not going to recover or Nissan they need something I think the ECB might well so ... will we wanted we want governments to do something but it may actually be the ECB the past do this the heavy lifting ... another one of the developments going with the Gemin Jennings went out at Tyndall said adding that feels good to make it tougher for the first time ever and it ... was pretty addictive have all the best it's ... like Oh prices they don't like about the euro was for Kelly and I are expected to show for people to see the safe haven in Europe German has now joined Switzerland and the negative ... yield club ... but also shows where people putting their money in case the worst does happen this is a worst-case scenario thinking ... if the euro does break up the rather be in a future torture mark ... I buy right then and something else ... I think they are the most we have bomb the Gemin ... Chasan and the of of because some physical process in the Jimmy do you think that a lot with anything that comes with a walk this is more pre summit on the ... corner lead to a stomach that probably won't have a lot more decide ... what we saw ... last month this is this ... this this practice compact on the school ... of solidarity on tighter convergence ... of leading up to the summit that they're going to have all the skill that is a blow to Tony did remark groundwork on how much more ... work to actually going to lay we do see the summit coming up at the end of the month ... that's where they're going to find decided that lets you read ... this is longer term fix the so-called top three for five years from now through rebuilding credibility has lost the last three or four ... Tsakos he may even lead ... his side ... with them ... and we note that the person who's leading the polls actually wants to renegotiate ... the talking about right now so that that's all for the year ... Greece they might default by the end of the month maybe next month certainly the strong possibility for ... before March ... Europe and in Europe is heading into recession ... we might get a French downgrade sometime later this week or next this is the kind of thing that really should all put in Abril stark relief the palms facing this region beyond what's going happen for five years ... to its usage shuffle Blues ... such a chubby ... kid last job we did have a few things that were hopeful that we had the European ECB giving back some of the money and the hope was that the device and costs on the sovereign it just ... doesn't seem to be happening either ... the deals steals continuing result was how do um ten year yields are still over seven percent ... it's unsustainable I mean it does look as if things ... at the beginning of twenty twelve ... really our only seem seem to be giving us that no signs been proven to be developing ... that's really the issuers and investors have lost law conference on things that are coming out of these communiques from various Summit's and ... Ecofin meetings ... that they do see that that the shorter term the short run risks as laudable as longer term consolidation ... and and governance changes have all ... the ribbon a lot better had they been imposed two or three years ago we've encountered ten years ago with the launch of the of the euro ... and sometimes that they're not perfect was can happen over the next three or four to two as the dangers of too little too late but I do love to get the euro's performance and in love with the thought that would perhaps be totally in the mold the edges of the moment one thing we have seen as the euro is going down ... what is good news of bad news and what we saw the end ... of last year was that when there was good news the euro rose with them is bad news it fell not wishing the euro turned down all the toys in Sezmi PCs week it was down to one twenty six against the dollar the night is now back about one thirty seven but even so ... it's a bit of resilience a little bit of resentment but I think is really interesting that even on days when when the stock markets go up the euro doesn't always the case so that that seem to from close family and I we all know the laws but it was taking a lot of bomb positions against the euro at the end of last at ... me this all this is continuing is unlikely to get in the West was the connection ... they knew was able to technically the market is very Shel to means most people in the market thinks the euro is going to fall ... and if that's the case that the was the risk of of those high because what happens all those people could be called out for me to be ... covering their positions and look it's a bit wild woolly ... nonetheless the key thing is the euro could